The Alberta Securities Commission yesterday published a blanket order to expand its exemption of certain issuers from the application of Multilateral Instrument 51-105 Issuers Quoted in the U.S. Over-the-Counter Markets.
As we've previously discussed MI 51-105 can subject issuers who carry out private placements to Canadian public company obligations. Adopted by every province other than Ontario, the instrument is intended to discourage the manufacture and sale of OTC quoted shell companies that can be used to facilitate abusive market practices.
In response to the concern that the instrument would have the unintended effect of subjecting major well-established issuers that trade OTC in the U.S. to Canadian public company reporting obligations, regulators in almost all Canadian jurisdictions that adopted MI 51-105 have issued blanket orders to exempt certain issuers from the application of the instrument (links to the orders are available on our Resources page).
Alberta's Blanket Order 45-514, released yesterday, replaces an earlier order that exempted the application of the instrument to issuers with a primary listing on certain stock exchanges or those distributing only non-convertible debt securities.
While preserving the exemptions from the previous order, the new order, has also adopted an investor-based exemption that exempts issuers that limit their promotional activities to "permitted clients" under NI 31-103 (essentially, institutional accredited investors). In doing so, Alberta's exemption is now more closely in line with the one adopted in Quebec.Continue Reading...